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Mason v. Machine Zone, Inc.

United States District Court, D. Maryland

October 21, 2015

MIA MASON, Plaintiff

         Decided October 20, 2015.

          For Mia Mason, individually, and on behalf of all others similarly situated, Plaintiff: Maria C Simon, LEAD ATTORNEY, The Geller Law Group, PLLC, Fairfax, VA; Benjamin H Richman, Courtney C Booth, PRO HAC VICE, Edelson PC, Chicago, IL.

         For Machine Zone, Inc., a Delaware corporation, Defendant: Thomas Dallas McSorley, LEAD ATTORNEY, Arnold & Porter LLP, Washington, DC; Allyson Tracey Himelfarb, Arnold & Porter, Washington, DC; Michael A Berta, PRO HAC VICE, Arnold and Porter LLP, San Francisco, CA; Sean Morris, PRO HAC VICE, Arnold and Porter LLP, Los Angeles, CA.


         James K. Bredar, United States District Judge.

         Mia Mason (" Plaintiff" ) filed a Class Action Complaint against Machine Zone, Inc. (" Defendant" ), producer of the popular Game of War: Fire Age (" GoW " ) mobile video game. Plaintiff alleges that aspects of GoW violate Cal. Penal Code § 330b; she seeks recovery under the California Unfair Competition Law (" UCL" ), Cal. Bus. & Prof. Code § § 17200 et seq. ; a Maryland loss-recovery statute, Md. Code Ann., Crim. Law § 12-110; and an equitable theory of unjust enrichment. Now pending before the Court are Plaintiff's Motion for Class Certification (ECF No. 2), Defendant's Request for Judicial Notice (ECF No. 8), and Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (ECF No. 7).[1]

         On the surface, Plaintiff charges that Defendant trampled real and important rights and interests of hers, wrongfully and unlawfully, in an alternative, virtual world created by an electronic game. But a careful probe beneath the surface reveals a hodgepodge of hollow claims lacking allegations of real-world harms or injuries. Perceived unfairness in the operation and outcome of a game, where there are no real-world losses, harms, or injuries, does not and cannot give rise to the award of a private[2] monetary remedy by a real-world court. Defendant's Motion to Dismiss will be GRANTED.

         I. Background[3]

         Defendant, a Delaware corporation headquartered in California, operates GoW, a " massively multiplayer" online game[4] available on Android and Apple iOS devices. (ECF No. 1 ¶ 1.) GoW is a strategy game played in real time; players construct a simulated empire comprising resource plots, buildings, troops, and a " hero." (ECF No. 7-2 at 2.)[5] The object is to coordinate with other players in strategic alliances so as, ultimately, to " conquer the world." ( Id. )

          GoW is entirely free to play. (ECF No. 1 ¶ 19.) However, some players, impatient for conquest, exercise an option to purchase virtual " gold" to " improve their virtual towns and hasten their advancement in the game." ( Id. ¶ 2.) Defendant maintains a digital " gold store" through which these players acquire " gold" with real money at rates ranging from $4.99 for 1200 pieces to $99.99 for 20,000 pieces. ( Id. ¶ 24.) Flush with simulated cash, some of these players then proceed to the in-game " Casino," where they purchase virtual " chips" to wager on a virtual spinning wheel. ( Id. ¶ ¶ 21-23.)[6] After each spin, players receive a virtual prize--ranging from an in-game " resource" such as " wood" or " stone" (useful elsewhere in the game) to additional chips or " gold." ( Id. ¶ ¶ 28-29.) Plaintiff alleges that the particular outcome of each spin is predetermined by algorithms in the software and that players are more likely to win " basic items" ( e.g., " wood" ) than valuable ones ( e.g., " gold" ). ( Id. ¶ ¶ 30, 36.)

         Crucially, there is no real-dollar value attached to " gold," chips, or any Casino prizes. On the contrary, Defendant's Terms of Service (" ToS" )--appended to Plaintiff's Complaint--provide that " Virtual Currency and Virtual Goods may never be redeemed for 'real world' money, goods or other items of monetary value from [Defendant] or any other person" ; that players receive a nontransferable " revocable license to use the Virtual Goods and Virtual Currency" solely for personal entertainment purposes; and that, aside from the foregoing license, players have " no right, title, or interest in or to any such Virtual Goods or Virtual Currency." (ECF No. 1-2 at 9.)

         Although the ToS expressly bar players from " buy[ing] or sell[ing] any Virtual Currency or Virtual Goods outside the Services or in exchange for 'real world' money or items of value" ( id. at 10), Plaintiff alleges that " players have created secondary markets to buy and sell Game of War accounts" (ECF No 1 ¶ 37). Plaintiff does not allege that Defendant hosts or sanctions these secondary markets, nor does she allege that she has ever sold or attempted to sell an account--nor even that she intends to do so in the future.

         Plaintiff downloaded GoW in early 2014; she began playing in the Casino shortly after downloading the game. ( Id. ¶ 43.) Plaintiff alleges that, over the course of about one year, she " lost more than $100 wagering at Defendant's Casino." ( Id. ) A citizen of Maryland, Plaintiff brought this action in diversity, purporting to represent a nationwide class of players and a subclass of Maryland players. Plaintiff alleges that the Casino is an unlawful " slot machine or device" under Cal. Penal Code § 330b; that Defendant has violated California's UCL by owning and operating this unlawful device, proximately causing Plaintiff and her class economic damages; that Plaintiff and her class have conferred a benefit upon Defendant that Defendant should not be permitted to retain; and that Plaintiff and her subclass are entitled to restitution under Maryland law.

         Defendant moved to dismiss the Class Action Complaint on June 29, 2015. (ECF No. 7.) Plaintiff filed a response in opposition on August 13, 2015 (ECF No. 18), and Defendant replied on September 10, 2015 (ECF No. 24).

         II. Legal Standard

         A complaint must contain " sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Facial plausibility exists " when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. An inference of a mere possibility of misconduct is not sufficient to support a plausible claim. Id. at 679. As the Twombly opinion noted, " Factual allegations must be enough to raise a right to relief above the speculative level." 550 U.S. at 555. " A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 555, 557).

         III. Analysis

         A. Cal. Penal Code § 330b (Count I)

         In her Complaint, Plaintiff accuses Defendant of violating a California statute criminalizing, inter alia, the manufacture, ownership, or possession of a " slot machine or device." (ECF No. 1 ¶ 53.) As Defendant correctly observes in the memorandum accompanying its Motion to Dismiss, the California Penal Code " does not provide a private right of action entitling Plaintiff to sue under it." (ECF No. 7-1 at 12.) And in her opposition memorandum, Plaintiff clarifies that she does not intend to raise Count I as a distinct theory of recovery. (ECF No. 18 at 13.) Thus, the Court has no difficulty dismissing Count I for failure to state a claim.

         Such dismissal does not, however, end the Court's inquiry. Plaintiff's Count II (her California UCL claim) is derivative of Count I: she bases her theory of UCL recovery on the premise that GoW 's Casino function is an unlawful " slot machine or device." Thus, in order to properly interrogate Plaintiff's UCL theory, the Court must consider the antecedent question whether the Casino function violates California state law.

         1. The Rule

         California law defines a " slot machine or device" as a " machine, apparatus, or device" that is operated by insertion of a coin or other object " or by any other means " and that " by reason of any element of hazard or chance" grants the user any of the following: (1) a " thing of value," (2) an " additional chance or right to use the slot machine or device," or (3) a token that may be exchanged for a " thing of value." Cal. Penal Code § 330b(d) (emphasis added).

         The Casino function appears to satisfy most of these elements. While not operated by insertion of a physical coin, it is certainly operated " by any other means," and there is no dispute that--from the player's vantage point--the spinning wheel involves chance rather than skill. Moreover, while the virtual prizes that Casino players may win have no real-world economic value,[7] section 330b appears to encompass purely in-game rewards. See, e.g., Trinkle v. Stroh, 60 Cal.App.4th 771, 70 Cal.Rptr.2d 661 (Ct.App. 1997) (flipperless pinball machines that awarded credits for free games, with better odds depending on how much money the player paid in, constituted illegal slot machines); Score Family Fun Ctr., Inc. v. Cnty. of San Diego, 225 Cal.App.3d 1217, 275 Cal.Rptr. 358 (Ct.App. 1990) (arcade systems that rewarded gamers with points for extended play were illegal slot machines). The Court assumes that virtual prizes tending to advance gameplay are sufficiently analogous to the credits and points awarded in Trinkle and Score Family Fun so as to fit within the broad parameters of section 330b[8]--and Defendant does not appear to dispute this contention.

         Defendant does, however, vigorously dispute Plaintiff's assertion that the Casino function is a " machine, apparatus, or device." Rather, Defendant urges, it is " software downloaded to an individual's Apple or Android device," and there is " no cognizable reading of Section 330b that would reach a software developer whose software was only installed onto the devices of others." (ECF No. 7-1 at 15-16.)[9] Plaintiff responds with citations to several cases in which California courts have found video gaming and digital sweepstakes systems to violate section 330b, but in each of these cases the systems at issue included elements of both software and hardware. See, e.g., People ex rel. Green v. Grewal, 61 Cal.4th 544, 189 Cal.Rptr.3d 686, 352 P.3d 275 (Cal. 2015) (integrated Internet café systems, through which customers swiped magnetic cards or entered numbers at computer terminals to play casino-style sweepstakes games, violated section 330b); People ex rel. Lockyer v. Pac. Gaming Techs., 82 Cal.App.4th 699, 98 Cal.Rptr.2d 400 (Ct.App. 2000) (phone card vending machines that paid out periodic cash prizes violated section 330b); Trinkle, 60 Cal.App.4th 771, 70 Cal.Rptr.2d 661 (jukeboxes that played music and afforded users a chance to win a money jackpot violated section 330b).

         Indeed, the most natural reading of the phrase " machine, apparatus, or device" calls to mind a piece of equipment, just as the phrase " slot machine" calls to mind a physical terminal with movable parts and flashing lights.[10] This natural reading is supported by linguistic authorities. See Black's Law Dictionary (10th ed. 2014) (defining device as a " mechanical invention" that may be " an apparatus or an article of manufacture" and machine as a " device or apparatus consisting of fixed and moving parts that work together to perform some function" ).

         Without California precedent directing the Court to construe " machine, apparatus, or device" as encompassing software in and of itself, and guided by the principle that " unless there is some ambiguity in the language of a statute, a court's analysis must end with the statute's plain language," Hillman v. IRS, 263 F.3d 338, 342 (4th Cir. 2001), the Court concludes that Defendant's ...

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